DeKalb schools facing $41 million shortfall

A DeKalb County schools spokesman confirmed March 1 that the system will need to cut money slated for school projects to close a recently-discovered $41 million hole in the budget.

DeKalb schools spokesman Walter Woods explained that at the DeKalb school board’s Feb. 29 meeting, Superintendent Cheryl Atkinson informed board members of the problem. In response, she is recommending the school cut costs from a list of 113 sales tax-funded projects to make up the difference and finish the big-ticket items on the list, like rebuilding Chamblee High School. School board members have not acted on the recommendations.

Atkinson told board members there would be an external audit of the capital projects account to determine exactly how the shortfall happened. School officials discovered the first symptoms of the problem when they realized completing Chamblee would cost $10 million more than expected, Woods said.

The deficit puts board members in a tough spot, District 1 school board member Nancy Jester said. Under the current list of cuts proposed by Atkinson, the system would cut money that would be spent completing the renovation Dunwoody High School. The school system also wouldn’t build a track at Peachtree Middle School, according to Jester. The news did not go over well with Jester and other board members.

“I am furious because these mistakes were so preventable in my opinion,” Jester said. “I applaud the superintendent for finding it and bringing it to light quickly, and here we are dealing with the reality of it.”

Jester said she does not support the current list of recommended cuts. She said at Dunwoody it could mean the finishing touches like baseboards and whiteboards for the classrooms would not be funded. She said DeKalb’s contractors renovated the High School’s media room for its mass communications program, but might not be able to rewire it correctly if the school board approves the current list.

“It’s left the program less functional than when they began (the renovations),” Jester said. “You can’t lose functionality. Renovations are supposed to be about getting functionality.”

District 1 DeKalb Board of Education member Nancy Jester

So how exactly did this shortfall happen? Woods said there are still some unanswered questions.

Woods said school officials several weeks ago discovered the plans for rebuilding Chamblee High School underestimated the costs by $10 million.

They did some more digging around and discovered the problems were much deeper than that, Woods said.

“We found a number of financing issues,” he said.

School officials in thought the third Education Special Purpose Local Option Sales Tax, known as SPLOST III, would pay for the projects and borrowed $300 million. However, for some reason that has yet to be explained, they did not factor in the $60 million needed to cover the costs of borrowing, such as interest.

Woods said school officials located some additional money to make up the interest gap, but the system is still $26 million in the hole, which is the bulk of the $41 million.

In addition to needing $10 million to finish Chamblee and the bond payments, the school system also learned:

– The school system expected $23 million in state money, but only received about $16 million.

– The system needs $500,000 to close out the prior education tax, known as SPLOST II.

Jester said she does not understand how the school system could not have accounted for the interest on the SPLOST III bond payments.

“How were we making interest payments? What were the mechanics there? I have questions about that,” Jester said. “I have to understand the mechanism of this problem. That bothers me tremendously.”

In November, voters approved SPLOST IV, renewing the penny sales tax for a new list of projects. However, that money won’t be used to tie up the loose ends from SPLOST III woods said.

“We want SPLOST IV to start with a clean slate,” Woods said. “Had we known about this in November we would’ve made some allowance in SPLOST IV. We didn’t know it until we looked at Chamblee High six weeks ago.”

Jester said it may be time for the state Legislature to pass a law requiring school boards to tidy up their books before approving a new list of SPLOST projects.

“When you run these programs one after the other, it muddies the waters,” Jester said. “It’s very confusing.”

Woods said he understands the news is tough for school staff and parents, but he said if the school system doesn’t take care of it, it can’t finish Chamblee, won’t be able to pay contractors and will risk losing federal money.

“It’s unfortunate,” Woods said. “It’s a hard choice, but we have to make this choice.”